N.Y. Group Calls on Workers’ Comp Board to Fully Implement Reforms

October 22, 2012

A local commerce association is calling on the New York State Workers’ Compensation Board to fully implement the workers’ comp reforms that were enacted in 2007. The group says the Board’s delay in fully carrying out the reforms has led to rapidly rising costs.

Passed by the legislature with bipartisan support, the 2007 reforms reflected a “grand compromise” that required employers, workers, and state government to accept major changes, according to a new report from the Rochester Business Alliance.

The Rochester Business Alliance is the chamber of commerce for the nine-county Rochester region — which includes Monroe, Genesee, Livingston, Ontario, Orleans, Seneca, Wayne, Wyoming and Yates counties.

The group’s report observed that under the reforms:

• Employers would accept increased weekly payments to injured workers, and higher fees for physicians who treat them.

• Unions that represent many affected workers would accept limitations on certain benefits, along with evidence-based medical treatment guidelines.

• The Workers’ Compensation Board would improve administration of the program to speed settlements and reduce non-medical costs.

The reforms promised to create a new, more efficient workers’ comp system that would function better for everyone, and lower overall costs for employers, the report observed.

The Rochester Business Alliance said employers have lived up to “their side of the bargain.” The maximum weekly benefit to workers has nearly doubled, and employer disputes of worker claims have declined by more than 60 percent, according to the group’s report. But the group argues that the Workers’ Compensation Board has been slow to implement the other reforms, some of which still aren’t in place.

As a result, the group argued, expected cost reductions have been “fleeting or nonexistent.”

In the first two years, the state lowered the base premium on which insurance rates are based — meaning some employers may have seen a price break, depending on the additional charges from their carriers. But the report found that overall, since 2006, average medical claim costs are up 11 percent, and indemnity costs (compensation intended to replace lost wages) have risen 20 percent.

The cost burden is especially painful for large employers who pay workers’ compensation claims directly, the report said. Instead of setting a base premium level, the state requires these self-insured employers to maintain security deposits to cover their total liability for workers’ compensation claims. But many of these self-insured employers have seen their deposit requirements skyrocket, contrary to the promise of reform.

Further, along with their insurance premiums or direct payments to workers, employers pay the state an additional assessment that’s ranged from 18 to 20 percent over the last three years — more than double the tax charged by any other state. These fast-rising assessments show that the reforms thus far are not working to reduce the administrative or claims costs paid by employers, according to the Rochester Business Alliance.

The report, titled “Unfinished Business: Five Years of Worker’s Compensation Reform, Still a Work in Progress,” can be found on the Rochester Business Alliance’s website (a PDF file). The Alliance said copies of the report have been sent to Cuomo administration officials, legislative leaders, members of the state’s Workers Compensation Board, and other officials.

Was this article valuable?

Here are more articles you may enjoy.